Hold that hard hat: property action hots up

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The commercial property world has begun the week on a busy note with acquisitions, redevelopments and, in the case of Lend Lease, the suspension of a share buyback.

The activity comes as the market awaits a flurry of merger and acquisitions activity among listed property trusts, with Deutsche Bank expected to reveal its planned $3 billion stapling deal as early as today.

Fund managers are still debating Macquarie Office Trust's tilt at Principal America Trust, launched last week, while General Property Trust's independent directors remain in talks with suitor Lend Lease on a range of issues, such as management and where the new trust would sit in the ASX200 Property Trust index, should their merger be successful.

Separately, Lend Lease chief executive Greg Clarke said the group had decided to suspend its on-market buyback, given it would announce its annual results on August 18. It suspended buybacks before revealing results this year and last.

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Mr Clarke said the buyback would be resumed on August 20.

Amid the takeover talk, several trusts are also preparing reports for the end of the 2003-04 financial year, with Centro Properties to unveil its result today and ING's two listed vehicles to report tomorrow.

Stockland, touted as a possible counterbidder for GPT, was the first cab off the rank this week with news it had struck an agreement with Coles Myer to buy and redevelop the retailer's Tooronga precinct in Victoria (including the Tooronga Village Shopping Centre and the old brickworks site), subject to local council planning approval, with an end value of more than $400 million.

The site is next door to the Coles head office, nicknamed Battlestar Galactica, in Melbourne's East Hawthorn.

Under the deal, Stockland intends to begin a master planning and rezoning process for a mixed-use redevelopment to include a Coles supermarket and liquor store, specialty stores, houses, townhouses, apartments and parkland.

Stockland managing director Matthew Quinn said extensive public consultation would precede the tabling of a detailed development proposal, expected in early 2005.

Coles chief executive John Fletcher said the Tooronga site had stood unrealised over many years.

"We are confident Stockland's plans will see it developed appropriately, including the creation of state-of-the-art retail facilities and a brand new Coles Supermarket and liquor store," he said.

Meanwhile, listed Valad Property Group and unlisted Eureka Funds Management are each buying a half share in 207 Pacific Highway, St Leonards, for a total of $117 million.

The vendors were Charter Hall and AMP Capital Investors.

Valad head of transactions Martyn McCarthy said: "This is the best new office building in Sydney outside the CBD, with terrific tenant covenants, lease terms and an attractive yield of 7.9 per cent."

The site is an A-grade, twin-tower development comprising 20,000 sq m of office space and ancillary areas with basement parking for 200 cars.